Modern arbitration software for Forex trading

Every day, our world is changing and is in a constant race with the technological progress, while the end of this is not close at all. Every process, both in business and the ordinary life, if not completely, then partly is already automated. The situation with the financial market is exactly the same: every fix api trader wants to automate his trade. It is clear that this must initially be achieved, because you need to automate, first of all, the working approach. However, there is such a trend in the market.

Speaking of automatic trading, I personally come to the idea of precisely speculative and high-frequency algorithms that are able to squeeze out the maximum from the movement of price quotes. If you analyze the forex market, the best results on the risk/yield ratio are demonstrated here by the fix api arbitrage approaches.

Today, the arbitrage principle of trading operations is one of the most popular methods of speculative operations on the fix api forex market. This principle of trading involves purely algorithmic execution of orders, which increases the profitability of the system and reduces risks by several times. This allows you to turn the speculative trading into a passive source of income.

Automation of this type of trading allowed creation of several types of arbitration robots that differ in the logic of opening trading operations, however, the analysis is identical. So we can distinguish three main types of modern arbitrage in the foreign exchange market:

    • Triangle Arbitrage: Triangular arbitration is a kind of arbitrage trading, the essence of which is to open positions on three financial instruments. This technique consists in finding the rate inconsistencies in the bids on the market between different players or even between different stock exchanges, brokers. The peculiarity of Triangle Arbitrage is that the algorithm analyzes various currency pairs and, on the basis of these discrepancies, opens positions. The success of the algorithm depends on the difference between the three currencies. This strategy allows you to cover applications from three market players and earn a small percentage of income on it. This, in turn, allows diversifying the risks and reducing them to zero.
    • Fix api Latency Arbitrage: to implement this approach (as well as the subsequent type), it is not necessary to analyze three different currency pairs, but it is enough to analyze the same financial asset on different stock exchanges. For the fix api forex market, these sites are brokerage companies. Returning to the work logic of this robot, the essence of the technique consists in opening a trading operation at the time of an exchange delay. Such a moment arises only when the cost of the same currency pair demonstrates the same dynamics, however, in one broker, the data is delivered with a delay, while the other is more recent and real. Under such conditions, one transaction is opened on the side of a slow broker in direction to a faster one.
    • Fix api 2-leg Arbitrage: This trading robot analyzes the value of a currency pair on different broker servers, but to implement this type of fix api arbitration, it is not important to know which broker delivers the quotes more quickly and which is slower. The thing is that according to the 2-leg Arbitrage, two transactions are opened in the direction of exchange rate discrepancies, and this exchange rate difference is fixed. For example, if the discrepancy in the quotes between two different brokers is averagely 2-3 points, and the maximum parameter historically reached 10, then it makes sense to set the value in the robot to 8 points. When it reaches these 8 points, a deal to buy from that broker will be open, where the quotes are lower and a sale will be made at the broker where the quotes are higher. Thus, when the value returns to the regulatory range from 8 to 2, the trader will receive 6 points of speculative net profit.

As you can see, each approach requires an immediate response to the changing market situation and even to manage several trading accounts at once. That is why, the arbitration principle has an algorithmic form ( ).



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